A movie-goer's concept of prison economy is likely that it's a cigarette-fueled barter system. That may be part of it, but it only scratches the surface. The truth is a violent world of sex, drugs and... postage stamps?

First off, the days of prisoners being allowed to have two packs of cigarettes a week are long gone. In California, and most other states, there is a full ban on any tobacco products. Regardless, smokers want their fix, and if you're familiar with the principles of supply and demand, you will understand that the price of tobacco in prison is astronomical. In fact, it can be even more expensive than dope, according to Officer Eric Patao:

"Tobacco right now is a huge commodity. It's actually more expensive than marijuana, depending on supply and demand. A lot of these guys are just addicts with the nicotine and they've just got to have it at all costs. They'll jeopardize their loved ones on the streets to try to smuggle it in. They don't care."

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Tobacco, drugs, and other contraband enter jails through the same (usually uncomfortable) channels that cellphones do, which we covered in depth yesterday. And prices are highly variable depending on what you're in for: the more secure the unit, the harder to get contraband, the higher the price. According to Officer Eric Patao, "A $15 can of Bugler tobacco can go for as much as $500 in prison."

For drugs, the same laws of supply/demand and unit security apply. "Dope can be as much as 10 times the street value," says Officer Patao. "An ounce of crystal meth after it is broken down can go for several thousand." Several thousand sounds like a lot of money, but bear in mind that in prison we're almost never talking about dollar bills.

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"With anything, you can pay with the price of stamps, canteen, sexual favors, hits, straight cash, whatever has monetary value," said Patao.

"Canteen" basically means food, which can be ordered from the catalogs mentioned in the video above. More on those in a second. As for hits? I had to ask, and Officer Patao confirmed that it was exactly what I was hoping it wasn't. Hits are an "attack on another prisoner. Just like a contract hit." That's a pretty goddamn chilling way of paying for a handful of cigarettes.

Not surprisingly, violence is also the most common form of bill collection. "If inmates don't get paid then criminal acts are going to follow," said Officer Patao. "Violence is going to follow... Then who gets hurt? Often staff members who are trying to break it up."

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I asked Officer Patao if weapons come in through the same channels as other contraband goods. He said not really, because they just make their own. Yes, we know. Holy crap, do we know. (If you missed our piece on inmate manufactured weapons, make sure you click that link.)

Maybe most surprising about the prison economy? The predominant currency is postage stamps. They can be procured easily and legally, and inmates are allowed to have them (though only as many as 40 at a time). This availability makes it the de facto form of payment, and here's a little fun fact: postage stamps are actually considered legal tender in the United States. That means that, technically, you could show up at Best Buy with a briefcase full of stamps and purchase a 50-inch 3DTV with them. Everyone in the store would hate you, but legally, they're supposed to accept it. [Update: as commenters have pointed out, they are not, in fact, legally required to accept it. However they could accept it as legal tender.]

There are legal purchases as well, of course, through a catalog system explained by Sam Johnson in the video above. Inmates work various jobs (commonly earning about 50-cents an hour, plus or minus, depending on the work), and that money goes into their accounts, which is primarily how they pay for catalog items (though their families can add money to their trust accounts, too).

What inmates can get differs prison to prison and unit to unit. The Access Catalog has the big-ticket items, like TVs and radios. The biggest, nicest TV you can get seemed to be a 13-inch RCA flatscreen for $216, with clear plastic and no speakers. None of the TVs have speakers, but as we learned in Monday's Prison DIY piece, there are some clever hacks to get around that.

Walkenhorst's has more small-ticket items. Candybars are a buck a pop. Just-add-water Asian food like Annie Chun's noodle soups are $5. They can get shoes from the likes of Adidas, Nike, Reebok, and other major brands, but they can only be black and white (no red Jordans for you, jailbird), and all other sorts of personal items. The coolest thing I saw on Walkenhorst's was customizable CDs where you pick your tracks for about $2 a pop. Cool that these guys can still make mixtapes, like an imprisoned John Cusack from High Fidelity.

Of course, network TV and Mars bars can only last a person so long, especially if that person is more accustomed to a wild and reckless lifestyle—and with most of these inmates carrying a life sentence, that's probably a safe assumption. That's why the barter system, as Machiavellian and downright terrifying as it might sound, has to exist. Since the beginning of recorded history, human beings have found a way to create altered states of consciousness (i.e. get effed up). If you think a little thing like prison can stand in the way of millennia of human evolution and resourcefulness, you are very much mistaken.

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Lockdown is all about the technology inside prisons, from weapons to hacks, contraband to cooking, and everything in between. We're bringing it to you directly from San Quentin State Prison in California. You can read the introduction to the series here, and see all of the other posts here. Tomorrow we'll be doing some cooking, so get your bibs on and check back.

You can keep up with Brent Rose, the author of this post, on Google+ or Twitter.

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Special thanks to Terry Thornton, Dana Toyama, and Sam Robinson of the California Department of Corrections & Rehabilitation for facilitating this visit. Thank you to Sergeant Don McGraw, Officer Eric Patao, and Officer Gino Whitehall for all of their time and help. And thanks to inmates Sam Johnson Sr., Richard Lawrence Alley, Shahid, and Marvin Caldwell for sharing a slice of their lives with us.